Many B2B Marketing readers will be well aware that the Bribery Act 2010 will now come into force on 1 July 2011 following the publication of the long-awaited Guidance on 30 March 2011.
The Bribery Act Guidance, published by the Ministry of Justice, makes it clear that a proportionate approach will be taken to the enforcement of the Act. Marketers and brands can now rest assured that it is not intended that the full force of the criminal law will be brought to bear on well run organisations affected by an isolated incident of improper conduct. Key points in the Guidance that you should be aware of are:
- Reasonable and proportionate corporate hospitality will not be affected by the Act.
- There will be no exception for facilitation payments and these could still be considered a bribe. Organisations that want to ensure they comply with the Act should refer to the Guidance and also seek advice if appropriate.
Establishing anti-bribery procedures
Whilst the Guidance encourages organisations to consider seeking some form of external verification or assurance as to the effectiveness of its anti-bribery procedures, this does not provide any guarantees. It should be borne in mind that such certification may not necessarily mean that the company has established its adequate procedures defence if faced with a charge under section 7 of the Act – more of that below.
The Bribery Act Guidance sets out six, non-prescriptive principles that are intended to help marketers and brands formulate procedures in line with their specific needs:
1) Proportionate procedures: The commercial organisation’s procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces.
2) Top-level commitment: Top-level management must foster a culture within the organisation which makes it clear that bribery is never acceptable.
3) Risk assessment: The commercial organisation must assess the nature and extent of its exposure to potential risks of bribery on its behalf by persons associated with it.
4) Due diligence: The commercial organisation applies due diligence procedures, taking a proportionate and risk-based approach, in respect of persons who perform or will perform services for or on behalf of the organisation.
5) Communication (including training): Bribery prevention policies and procedures must be embedded and understood throughout the organisation through internal and external communication, including training, and should be proportionate to the risks it faces.
6) Monitoring and review: The commercial organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.
Section 7 – failure to prevent bribery
In section 7, the Guidance clearly states that businesses could be liable for the corporate offence of failing to prevent bribery by reason of third party actions – if the third party could be deemed “an associated person” under the Act. However commercial organisations will only be liable if that third party performs services for the business. At present therefore it is thought very unlikely that a business would be held liable for the actions of someone who simply supplies goods to the business.
If an organisation is caught out under section 7, there is a full defence to the corporate offence if the organisation can show it had adequate procedures in place to prevent bribery, and, as outlined above, the Guidance aims to help companies to put these necessary procedures in place. However, be aware that the Guidance also makes it clear that compliance, or non compliance, with the six principles referred to above will not necessarily be conclusive when it comes to establishing the criminal liability of a business.
Foreign companies operating in the UK
Although the Guidance has helped clarify many aspects of the Bribery Act, there is still debate as to the extent that the Act will apply to foreign companies. The Guidance suggests that simply being listed in the UK but not carrying on business within the jurisdiction will not engage the Act. Conversely, the Serious Fraud Office has indicated that it will adopt a wide approach to its interpretation of the Act, so ultimately it will be left to the courts to decide.
It appears as though the Government has listened to the concerns UK businesses had expressed about the Bribery Act, and marketers and brands can all breathe a sigh of relief to knowing that the Act will not be quite as Draconian as previously thought. That said, it’s best to act now so your business can be as well prepared as possible for the implementation of the Bribery Act on 1 July.
To view the full Bribery Act 2010 Guidance visit: www.justice.gov.uk/guidance/bribery
